The National Living Wage
The announcement by the Chancellor in July 2015 that from April 2016 there would be a new minimum rate of pay for those aged 25 and above of £7.20 came as somewhat of a shock to many. What we know about this new legally set regime is quite limited, for example the rate is due to increase to £9.00 by 2020 and this would theoretically represent a year on year increase of 6%.
This new initiative by the Government understandably overshadowed the annual announcement in October 2015 of the increase to the levels of the National Minimum Wage (NMW) and the November 2015 increase in the confusingly similar Living Wage which is a voluntary construct not to be mixed up with the National Living Wage (NLW).
At the time of writing questions remain about the NLW relationship with the NMW (e.g. impact on October 2016 rate?) and issues such as enforcement, the relationship with the independent Low Pay Commission, the role of the evidence-based approach to setting the rate and so on.
Stakeholders such as the Confederation of British Industries (CBI) have voiced concerns about the entire concept of the NLW and the perceived gamble it represents, whereas other stakeholders such as the trade union movement have given the NLW a cautious and heavily caveated welcome.
One issue that has been perhaps glossed over is the actual age criteria attached to the NLW and the impact on things such as younger workers, recruitment patterns and trends, the impact in certain sectors such as healthcare and retail, impact on workforce planning (core and peripheral) and the long term impact of broader initiatives such as benefit reforms, including universal credit.
It is difficult to separate out the NLW as a purely employment law issue because it is much more than this in terms of its political and ideological base. As such it will only really come under the employment law microscope later in 2016 whereupon the impact on socially protected identities related to age and gender for example may become clearer. Whether or not, as with the NMW, the NLW will effectively be exempt from challenge or be objectively justifiable remains to be seen but either way the full social and legal impact of the change remains as yet unknown.
Download our latest employment equality law update (April 2016, pdf, 2.46mb) - This newsletter is produced by the Equality Commission and the Labour Relations Agency and focuses on equality and employment law from a Northern Ireland perspective.